China car sales likely to see record plunge in first two months of 2020
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Beijing
CHINA'S car sales are likely to slump the most on record in the first two months of 2020 as the coronavirus keeps buyers away from showrooms, intensifying headwinds for carmakers in the world's biggest market.
Sales are set to fall by 25 per cent to 30 per cent in the January-February period, according to a preliminary forecast by Cui Dongshu, secretary general of China Passenger Car Association. The virus outbreak is expected to drag down China's full-year car sales by as much as 5 per cent, Mr Cui said on Tuesday.
China's car sales were already heading for an unprecedented third straight annual decline before the virus forced authorities to lock down the epicentre of Wuhan city and beyond. About two-thirds of China's economy remains closed this week and companies are set to face difficulties when operations resume, including potential supply chain issues and parts shortages.
"China's car industry has never had to factor in so many negative issues - the challenges have been piling up," Mr Cui said. "It will take months for economic activity to return to normal. People's purchasing power will be undermined by falling incomes."
Companies from Tesla to Volkswagen and Toyota have warned of disruptions in their operations. Carmakers will probably dial back production by 15 per cent in China this quarter after extending holiday shutdowns because of the virus, supplier Aptiv Plc said.
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The PCA is scheduled to report China car sales for January next week. BLOOMBERG
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